The findings of the ITAT are binding on the criminal court and can lead to the quashing of criminal proceedings.

A.S.Bains, J.

1. Facts giving rise to this petition under Section 482, Cr. PC. are as follows:

2. Parkash Chand, petitioner, is a partner of M/s. Sharma Textile and General Industries, village Piao-Maniyari, District Sonepat, along with Deep Chand, Ishwar Singh and Prahlad Singh. The aforesaid firm carries on business as traders and manufacturers of tapes, newar and wicks.

3. The ITO, Sonepat, filed a complaint against the petitioner and his co-partners, Deep Chand, Ishwar Singh and Prahlad Singh on 28th March, 1974, in the Court of the Chief Judicial Magistrate, Sonepat, under Section 277 of the I.T. Act, 1961, and under Sections 192, 193, 467, 468 and 471 read with Section 34 of the IPC pertaining to the assessment year 1970-71. The petitioner was charged for the offences under Section 227 of the I.T. Act, 1961, and Sections 193 and 471 of the IPC, by the learned Additional Chief Judicial Magistrate, but his three co-partners were discharged by him. The case against the petitioner is pending before the Additional Chief Judicial Magistrate. It is in this situation that the present petition for quashing the proceedings pending in the criminal court against the petitioner is filed.

4. Mr. H. L. Sibal, learned counsel for the petitioner, canvassed that in view of the findings given by the Income-tax Appellate Tribunal in its order dated July 22, 1978 (copy of which is annexed with the petition as annex. "P-1 "), the proceedings before the Magistrate cannot continue. I find merit in this contention. The assessment order for the assessment year 1970-71 was passed by the ITO on 28th February, 1973, whereby he also initiated penalty proceedings under Section 271(1)(c)of the I.T. Act against the petitioner. On a reference by the ITO, the penalty proceedings came before the IAC, Ambala Range, Ambala, who, vide his order dated 17th March, 1975, imposed a penalty of Rs. 13,192 upon the petitioner. Aggrieved by the order of the IAC, the petitioner preferred an appeal before the Income-tax Appellate Tribunal, Chandigarh Bench, which was allowed and the penalty levied on the petitioner was cancelled. The revenue approached the Tribunal for referring the matter to the High Court, which was dismissed on 7th December, 1978. Thereupon, the revenue approached the High Court for the issuance of a writ of mandamus to the Tribunal to refer the question of law to the High Court, but the same was also declined by the High Court, vide its order dated 25th September, 1979 (copy of which is annexed with the petition as annex. " P-3 ").

5. The Tribunal while setting aside the order of IAC in para. 14 of its judgment gave the finding that none of the authorities below established clearly that particular items of purchases were inflated and as such there was no proof that the assessee had concealed income or furnished inaccurate particulars of income to the extent of Rs. 13,912. The operative part of the Tribunals order is reproduced below :

" Now coming to the merits of the penalty, we find that in the impugned assessment order, the Income-tax Officer states at page 2 that purchases to the extent of Rs. 1,12,911.80 shown by the assessee in the accounts, were not susceptible or verifiable. Thereafter, he points out that it was confessed by Shri P. C. Sharma, one of the partners, that some of the documents in the form of letter-heads, etc., by which the purchases were shown as having been made were fabricated. But when he gives the final analysis, he estimates the genuine purchases at Rs. 1,00,000 and deducts this amount from the purchases of Rs. 1,13,912 and treats the balance of Rs. 13,912 as on account of inflation in purchases. In doing so, he does not specifically pinpoint the inflated purchases. Now, in the impugned order, the Inspecting Assistant Commissioner has done precious little to improve upon this situation. He has merely referred to the order of the Income-tax Officer and proceeded to levy the penalty. Thus none of the authorities be